Why Does Hollywood Insist On Making Online Movies So Annoying?

from the simple-questions dept

With Google announcing that it's now offering 3,000 movies for "rental" via both YouTube and Android, it's worth asking a simple question:

Why does Hollywood insist on making online movies so damn annoying?

If you look at pretty much all of the online rental options (with the exception of Netflix), the deal terms are almost always identical. Prices range a bit, but for big name movies they're $3.99. The rental term is 30 days from when you pay... but once you start watching, you only have 24 hours to watch. This particular limitation is particularly annoying to those of us who don't always watch movies in a single sitting or a single day (it's amazing how your movie watching gets fragmented once you have little kids).

Obviously, this has become the standard set of terms that the Hollywood studios are demanding, but these limitations are annoying and make no sense. Why put artificial limitations on offerings like this, making them less valuable and a lot less interesting? It also means that there's little innovation in the space. Basically, every offering in the space (again, with the exception of Netflix, who got grandfathered in with its unlimited model) is basically the same. The only innovation is around the device or the very front end of the service. There's no innovation in the actual model, which is a shame, because this "standardized" offering is really quite annoying and not at all compelling.

Reader Comments

Mike you are wrong...

For big names movies the price is much more than that ($6.00) through the outlets that people usually access them. On-Demand, Anyone?

You are right that they make them much less valuable because I want to be able to watch the movie how I want not how I am told to watch it.

Let me put it this way I would watch hundreds more movies a year at a price of say $1.99 than I watch at $6.00.

So lets do the math I currently watch about 2 movies a year On-Demand (basically only because I am bored) but I would buy 7 or 8 a month at least if I only had to pay $1.00 or $1.99. (Redbox is cool but never has the movie I want because of limited stock, although I also do Netflix) so right now they make about $16.00 a year from me, but if they changed they would make between $96 and $191 a year from me.

Re: Mike you are wrong...

I think you're missing something that the studios are more than aware of. *You* only rent 2 movies a year at the current prices, but many many other people rent movies constantly, several a month, at the present price scheme.

You have to consider: would people like you, who would rent more at lower prices make up for all the lost revenue from the people who are already paying $4 if the price was lowered to $1? They would be losing 75% of their revenue from their established base of constant renters; it would take a huge uptick in new rentals and customers to make up that difference.

You are presuming that no one agrees with the pricing scheme, but I suspect that is an incorrect presumption. OnDemand and such services seem popular enough that the concept has been around for many years now. I assume it is profitable.

Re: Re: Re: Mike you are wrong...

Re: Re: Mike you are wrong...

You assume that less people renting is equal to bigger margins that is most probably not true at all.

Higher prices = less people paying
Lower prices = more people paying

There is also a psychological factor at $4 a pop, only the rich/stupid will not pay attention to how much movies they watch, if you watch one movie per day in a month there goes $120 per month that ends up like $1460 per year.

Cable is half the price, and many many people complain already about how high it is.

At that price point you just get cable or something.

Also most kids are growing up with ultra-realistic games that actually have a story, games are now interactive movies.

So if they keep increasing the prices they lower the market size and get limited to a class of people that they need to cater to, that could lead people to go cater to the others who where left out and create a new market that could destroy the old players.

Re: Re: Re: Mike you are wrong...

Re: Re: Re: Re: Mike you are wrong...

You didn't, Huph did. Nicedoggy was disagreeing with him.

Huph said the people who already rent 8 movies a month at $4 outweigh adding your 8 movies a month at 1$ each. It makes a little sense, each of you are now paying $8 per month instead of one of you paying $32 per month. This doesn't take into account the likely possibility of the second party starting to watch more then 8 movies a month and there's a chance the market can more then quadruple.

Re: Re: Mike you are wrong...

Hope the content companies are alright with the amount of money they are making right now then. I don't think you will see new generations that are satisfied with the entertainment landscape.

With the way they are lobbying and the amount of attention they pay to infringement I imagine they are hurting and trying to figure out ways to increase revenues. Creating scarcity where one does not exist and making an irritating service wouldn't be my first choice for great ideas.

Re: Mike you are wrong...

So you say Mike is wrong.....and then you completely agree with him???? I'm lost.

As to what your saying, it just makes me laugh and remember my economics class where we learned how to prove that this is absolutely true. Pricing closer to the cost of the item will begin to increase sales exponentially, in the end making greater profit.

But then again, every single business major in my class completely failed to understand the graphs used to show this relationship....so I guess I shouldn't be surprised that none in the business market seem to believe it.

24 + 2

The rental term is 30 days from when you pay... but once you start watching, you only have 24 hours to watch. This particular limitation is particularly annoying to those of us who don't always watch movies in a single sitting or a single day (it's amazing how your movie watching gets fragmented once you have little kids).

Amen, brother. I got burned by this the first (and only) time I rented a movie online. Things start to calm down around my house at about 8:30, so if I'm going to watch any TV, this is when it starts. So, one night, at about 8:30, I start watching the rented download. But I didn't finish it, so the next night, at about 8:30, I sit down on the couch and go to restart the movie. But of course, I'm trying to watch the movie at the very time it's expiring!

If they were intentially trying to frustrate their customers, they couldn't have done a better job. Why not make the expiration 24 hours plus the average length of a movie? Are they really thinking that people should pay twice to watch a movie across two days? Are they being stupid or evil?

Re: 24 + 2

"Are they really thinking that people should pay twice to watch a movie across two days?"
Yes. They also expect you to see it in theaters, perhaps more than once, and also buy the DVD or Bluray. Oh, and buy it again once they start selling some new format.

Re: Re: 24 + 2

Well, back when you could rent a physical movie for $2 to $3 a night, you of course had to pay a late fee if you kept the movie for 2 days.

It doesn't make sense in a digital scheme, but consider that late fees weren't truly a result of combating scarcity and making sure that the next customer could see the movie they want, late fees are just another revenue source. At one point in time, at places like Champagne Video and Kim's in NYC (full disclosure: I used to work there), the majority of revenue came from late fee charges. We especially wanted movies that had little demand to be returned late, because it was like selling two rentals at once for a movie that wasn't likely to be rented again any time soon.

Same deal with credit card companies. They have no interest in you paying your bills on time. They want you to be late with your payments and incur charges. Banks, too, in regard to overdraft fees.

But it does seem incredibly fishy in the digital market. There's no need to emulate a brick and mortar store, but I suppose it does make them some money.

Re: 24 + 2

Exactly, I used to rent about 6-10 movies a year on DirecTV, especially after I got a DVR. I rented LOTR: ROTK in HD way back when HD was new. I had that on my TiVo for about 5 years and watched it 2-3 times.

Like the parent post, the first time I rented a movie that we couldn't finish the same night because an emergency came up, and the next night it was deleted off my DVR, was the very last time I rented a movie on DirecTV.

And this is why...

...alternative distributions methods are sooooo much better. Heck, I now torrent the movies that I've bought on DVD because the damn DVDs are incredibly annoying, loaded with unskippable warnings and previews and crap.

All movies should be a couple of bucks, no DRM, no warnings, no commercials, downloadable on demand or shipping on DVD for a few extra bucks, the moment they're released. If theater owners can't compete, then let theaters die. They're expendable.

Re: Buy it

Agreed. That's used DVD price right there. The single reason I'm not at all interesting in digital rentals is the price. The timeframe stuff mentioned in the article is also a huge turn-off. The timeframe BS could be overlooked if it was like $0.50 (or less) for a rental though.

This comment struck a chord, because I have little kids myself, and my partner and I have tried to get them to watch movies for "family movie night," but they are surprisingly not interested in this at all. Besides the previews, they simply are of another generation where their content isn't desired in a static two-hour presentation. I'm not saying they are ADHD, because my son can build a catapult for hours on end and experiment with different ways to make it work, I'm just saying movies are going to have a hard time in the future competing with other media out there.

ESPECIALLY on youtube, where anything over two minutes deserves a TLDR.

Re:

I wouldn't want to diagnose anyone online, but there's nothing fundamentally incompatible with ADHD and "can build and experiment with X for hours." In fact, quite the reverse: many on the autism-spectrum or ADHD are characteristically unable to shield themselves from distractions when bored and unable to admit outside interruptions when working on something tied to their own interests.

Re: Re: Re:

Re: Re: Re:

I am not a doctor, but my impression is that you are correct. Most diagnosed ADD kids are, in fact, normal.

I know several ADD kids and they can't watch a movie or finish a video game. They can't even make it through one level on a game (or one quarter in soccer) without playing around (not focusing enough to keep with the plot and doing random stuff instead).

My younger daughter is this way a little. She has a hard time finishing an hour TV show and could never watch a 3-hour sporting event without getting up repeatedly or talking to everyone the whole time. She plays around on levels a bit instead of finishing the plot of the game.

What do I do? Diagnose her? Medicate her? No, she's in gymnastics and it REQUIRES concentration or you can get hurt. We encourage her to finish video games that she gives up on. We read a chapter or two of the Bible every night and ask the kids for feedback, improving their comprehension skills while listening to something difficult and occasionally over their heads.

This trains them to do the same in life instead of making excuses. She is making tremendous progress, to the point where I used to think she was AD(H)D, now she doesn't show the signs nearly as much. If she was younger, I have no doubt she would have been diagnosed if we took her in. But maybe she's just a kid and needs to be taught to sit still, work hard, listen well and concentrate on things until completion.

Re: Re: Re:

Know the math

The whole kids thing also exposes another fatal flaw in the $4 rental model or even the $1 rental model. Kids love to watch the same thing over and over again. You can easily reach the point where it makes much more sense to just buy something rather than go the PPV view route.

Perhaps they are depending on the generally shoddy state of math education...

It's not just online movies. I've noticed that more and more of the DVDs that Netflix rents are special "rental editions" that have additional ads and anti-viewer junk mixed in.

Makers of DVD-to-TV players all signed on to a ridiculous agreement that requires certain features or playback disabled based on the DVD, such as region coding, and forced chapters you can't skip. Many popular PC-based DVD viewer apps automatically skip all of this junk and jump straight to the first "menu" chapter on the disc. What do you know, you insert a DVD to watch the movie, so programs that facilitate that goal instead of impeding it are quite popular.

Newer DVDs (especially Disney) fake this strategy out by making a dummy "menu" chapter, ostensibly to choose audio tracks, then insert as many as twelve little chapters with previews, ads, FBI warnings and dumb opinion disclaimers before it comes to the real PLAY menu chapter. They reorder all of the chapters.

I've considered a CDDB/Gracenote extension that would let people mark the real PLAY menus for each title, but it's just a cat and mouse game that shows that the content guys just don't understand how to deliver content.

How DARE they ask me to pay 4$+ for a "low quality stream" I can view only once (legally - or unlimited for 24 hours yay let's loop through it) when I can have the 1080p version for 2.5x that price and watch it forever (or as long as original copies are available and the rental place still exists)?

In my world, we call that afraid to compete. How can the rental place compete but not the major labels? Makes no sense whatsoever. Greed is killing them. I hope greed succeeds.

I'm convinced that Hollywood does that intentionally so they can point to low revenue numbers and say "See! Legitimate digital distribution methods don't work because of piracy! Clearly we need more stringent intellectual property laws to protect the methods that do work!" They're effectively creating their own straw man that they'll use later on.

Re:

MIke, You are right.

I have little kids too, and it often takes me a week to watch a movie. Hail Netflix and their restart from where you left off feaure! 24 hours to watch a movie in my house would never happen, and I would never subscribe to a service that had that limitation.

When you think about it, the 30 day rental part is completely irrelevant. I mean, why on earth would you rent it if you weren't going to watch it right then? So in all actuality, you only have 24 hours to watch a movie. Way too short. Do they honestly think that it'll hurt their revenues in the slightest if people can watch it over a longer period of time? There are only a scant few number of movies that deserve a second viewing (and none of them were made by today's Hollywood), so I really don't think they would even lose any revenue if they extended it a couple more days to like 3 or 4 days.

Re: RE: Are they being stupid or evil?

Dear Techdirt.

What you're describing is called "price fixing" and it is against the law. However, because of copyright, these are conveniently called "licensing options", which prevents these companies from being sued or fined by entities which control other businesses, especially those who are competing (such as Redbox and the now defunct Blockbuster, both of whom were forced into said price fixing).

It should also be pointed out this practice is now headed toward the Supreme Court for a hearing as others found it interesting these prices *are* the same across the board.

When there is no physical product to purchase and lend out, rental becomes a farce, as what people are really doing is copying the same file.

This is why the newest legislation, titled PROTECT IP, is now in motion because these profits of charging everyone for access to the *same* file is more important than providing reasonable expectation people get what they pay for.

If there are any questions regarding this information, my apologies as they'll go unanswered because we've a Congress too stupid to see what's before them while using words like "theft" to protect these interests.

It is all very logical

Hollywood wants to encourage more pirates. This way they can send out more 'settlement' letters and make thousands in profit for a movie they never spent a dime to deliver to you. They could make a small amount off you if rented it (maybe a buck) but the big money will be the revenue generated by 'settlement' letters. The 'settlement' letters would actually get more money out of than if you even bought it.

Because they can...

> Why does Hollywood insist on making online
> movies so damn annoying?

Same reason they make DVD movies so damn annoying. I popped one in last night and 20 minutes later, I was still waiting to get to the frakking movie. Almost a dozen previews and disclaimers and studio logos and FBI warnings and commercials for crap I don't want... and my FF/Next Chapter/Menu buttons disabled through all of it.